Franklin Templeton discloses fees, starting a ‘fee war’ for the spot Ethereum ETF

Franklin Templeton, an American multinational investment company, has submitted a revised S-1 application for its proposed spot Ethereum (ETH) exchange-traded fund (ETF) product and is the first applicant to disclose its fees to investors.

“Sponsor’s fees accrue daily at an annual rate equal to 0.19% of the fund’s net asset value,” Franklin Templeton said in a May 31 filing with the U.S. Securities and Exchange Commission.

Bloomberg ETF analyst Eric Balchunas declared in an X post on the same day, “The ETH ETF fee war started with Franklin.” He cut short a question about whether it could be “for some startup,” insisting that it “looks permanent” with the same fees as Franklin’s spot Bitcoin ETF product.

Sponsor fees, which are fees to compensate fund managers for management costs, are a competitive aspect of ETF products. This is because investors typically choose products with the lowest fees.

VanEck, Invesco and Galaxy also simultaneously filed amended S-1 applications on the same day, but none disclosed their sponsor fees.

Other Ether ETF applicants have not yet disclosed their sponsor fees.

An S-1 application is a registration statement that a company must file with the SEC, containing detailed information about the company and the securities it intends to offer or issue.

“Also, the new S-1 has no fees. The fee war is currently on hold,” Balchunas added.

Shortly before the launch of the spot Bitcoin ETF in January, Balchunas referred to the ongoing S-1 filing amendments for fee adjustments as a “fee war.”

Some issuers have even waived fees entirely to increase competitiveness. Bitwise has waived all fees on spot Bitcoin ETFs for the first six months of trading and the first $1 billion in assets.

Related: Ethereum ETF launch in June ‘legitimate possibility’ as BlackRock files S-1

Grayscale Investments and BlackRock filed amendments on May 30 and May 29, respectively. “It’s a good sign,” Bloomberg ETF analyst Eric Balchunas commented at the time. Perhaps the break will begin soon.”

He noted that there will likely be another round to “fine-tune” the SEC opinion, but said a spot Ether ETF launch by the end of June is a “legitimate possibility.”

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